Why do people invest in Bitcoin? Some invest in it in order to make impressive gains on their investment. That’s understandable, considering you could buy Bitcoin for $0.08 in 2010, and it’s worth over $40,000 in 2021.
People also buy Bitcoin for its security. The blockchain empowers a decentralized currency that is not controlled, nor can it be manipulated or banned, by any single entity.
That means no governments or banks can interfere with cryptocurrencies like Bitcoin. This is ideal, especially for those living in countries with unstable economies.
But you need to know how to receive Bitcoin securely if you want to actually take advantage of these benefits. Because Bitcoin and other cryptocurrencies are so valuable, they are big targets for hackers and thieves.
Luckily, it’s quite easy to send and receive Bitcoin in a secure fashion. You just need to know what you’re doing ahead of time. Keep reading to find out how to receive Bitcoin the safe way today.
How Bitcoin Moves
Bitcoin isn’t like cash. When you receive cash, your balance goes up in your bank account. This means that money is sent to your bank, and your bank credits these funds to your account.
In theory, your bank holds onto these funds in its reserves, and when you spend the money, your bank sends it to the receiving merchant. So the currency itself is moving.
But it’s not like that with Bitcoin and other cryptocurrencies. When you buy Bitcoin, the transaction is recorded on the public ledger, known as the blockchain.
You don’t have a Bitcoin bank account, where the digital currency actually lives. Rather, it’s the transaction details that matter the most. Each transaction comes with a set of keys, or strings of code, proving that you now own the Bitcoin.
This code is what enables you to “receive or send” the Bitcoin. So the coins themselves aren’t moving. Rather, the transaction details and codes are. But where do they go?
What Is a Bitcoin Wallet?
In order to receive Bitcoin, you need a Bitcoin wallet. This is what stores your Bitcoin transaction information, keeping it safe and under your control.
Bitcoin wallets are not like bank accounts. No one controls them except for you. No one can censor your transaction like a bank could if it doesn’t like what it is seeing.
You can either get a software wallet, known as hot storage or a hardware wallet, known as cold storage.
Software wallets are apps downloaded to your phone or computer. They are known as hot storage because your device is always connected to the internet, meaning there is some risk, should your device fall prey to hackers through malware.
Byte Federal is a Bitcoin ATM provider that also provides users with a free software wallet. Check out their service here to start collecting coins.
Hardware wallets are physical storage devices that resemble a USB thumb drive. These are known as cold storage, as they are rarely connected to your computer, and thus never connected to the internet. They are the safest option, as there is no way for hackers to access your Bitcoin on a hardware wallet unless they physically steal it from your home.
Your wallet contains a public key and a private key. These are what you use to send and receive payment through Bitcoin.
How to Receive Bitcoin
To receive Bitcoin to your personal wallet, you’ll need your wallet’s public key. This is the key that is safe to share with others, as it can only be used to receive Bitcoin. It can never release funds or help others decipher your private key.
If you bought through an ATM, you would display a QR code of your public key to the ATM, which then sends the funds to this address. If you buy on an exchange, you copy and paste your public key when making a purchase.
For peer-to-peer transactions, you just send other users your public key, and they can easily transfer Bitcoin to this address.
How to Send Bitcoin
Sending Bitcoin is just as easy. From your wallet, you initiate a transfer. You input the receiving wallet’s public key and confirm the transaction.
Things to Know About Transferring Bitcoin
Many people wonder how to receive Bitcoin anonymously. This is both normal, and impossible, at the same time.
The benefit of Bitcoin is that it’s decentralized. It’s not tied to a bank account, where a bank knows exactly where your money comes from and where it goes. It can’t be controlled by the bank.
And when you open a cryptocurrency wallet, you don’t actually need to use any personal information. Crypto wallets simply use complex strings of characters as their wallet address. Your name, email address, mailing address, phone number, or any other personal information isn’t involved with sending or receiving Bitcoin using your wallet.
However, Bitcoin lives on the blockchain. And the reason the blockchain is so secure is that its open-source, and all transactions are verified across many different nodes throughout the world.
What that means is that every transaction is recorded and made public. Anyone can view the blockchain to see all transactions.
However, all you see is a wallet address. For the most part, nobody knows who owns any particular wallet, unless someone has chosen to make those details public.
So in this sense, all of your transactions are anonymous. However, if governmental or law enforcement authorities suspect you, or suspect a particular wallet address, is engaging in illegal activity such as money laundering, they could launch an investigation.
The blockchain has helped catch criminals in the past. So if you are doing sketchy things, you might get caught. If you aren’t, your identity will remain anonymous.
Eliminating Security Concerns
As you can see, it’s not hard to send and receive Bitcoin in a safe and secure manner. The most important thing you can do is have a reliable crypto wallet in place. Then, protect your private key at all costs, because if someone gains access to it, they can steal all your crypto.
And if you lose it, you might not be able to regain access to your crypto. By keeping your Bitcoin in your own wallet, and keeping your private key safe, you shouldn’t have any security concerns when it comes to crypto.
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